In a whirlwind start to the year for crypto, it’s been announced that Tesla, led by Elon Musk, purchased $1.5 billion in Bitcoin in January, with the investment sending the currency up by 13% to over $43,000 in Monday trading.
The increase in value now means that one Bitcoin would be enough to purchase one of Tesla’s lower end vehicles.
Following the purchase, a statement from Tesla said that the company expects to start accepting the cryptocurrency as payment in future, having “updated its investment policy”.
The announcement comes in the wake of much endorsement of Bitcoin and other cryptocurrencies from Musk on Twitter, and the Tesla CEO recently said that currency is “on the verge” of being more widely accepted by investors.
While “#Bitcoin” was removed from Musk’s Twitter bio, the founder of SpaceX has continued to talk up Bitcoin and Dogecoin.
However, while demand for emerging decentralised finance is clear to see, Romain Pellerin, CTO of global blockchain engineering firm IOHK, believes that crypto isn’t likely to thrive globally in the long term if platforms do not work together.
“Personally, I was pleasantly surprised by Tesla’s announcement, although Elon Musk’s Twitter posts about Bitcoin and other coins over the last few months have hinted at his interest in cryptocurrencies,” said Pellerin.
“The recent integration from large players like Paypal as well as the growing interest from major payment networks like Visa and Swift show that cryptocurrencies are here to stay. But while demand is here, the question remains whether cryptocurrencies like Bitcoin can fully service it.
“Given Bitcoin’s monumental and growing carbon footprint, it is simply not sustainable to maintain its current market dominance. There is an obvious need for alternative cryptocurrencies like Cardano in order to meet the demands of the global financial system and to scale without impacting our vital and precious energy resources.
“There is an emerging consensus that there will not be one platform to rule them all in crypto. Similar to the way we built the internet from the interconnection of private networks, increased collaboration among traditional private banking and public cryptocurrency networks is necessary in order to reach a fair and accessible global finance.”